New book offers roadmap to retirement in hard times

A new book by Mark Miller, a Chicago area resident and expert on aging, looks at retirement planning and strategies.

A new book by Mark Miller, a Chicago area resident and expert on aging, looks at retirement planning and strategies.

It is possible to have a happy and fulfilling retirement even when economic conditions look bleak. That's the view of Mark Miller, an expert on aging and the author of a new book, "The Hard Times Guide to Retirement Security" (Bloomberg). But reaching retirement security does take some rethinking of outdated notions and lots of planning. Miller, a Chicago area resident, talks here about his book and some of his practical retirement strategies.

Q: Why did you write this book now?

A: Before the economy crashed Baby Boomers weren't doing a lot of retirement planning. Retirement was just something that Boomers figured they were going to work out. At the same time, they wanted to reinvent retirement. They didn't want to retire in the traditional way.
With the economic crash in 2008, these trends came together. We have the biggest generation of Americans approaching a transition in their lives without having done a great job of planning in the face of the worst economy since the Great Depression. I thought, there has to be a book there. I try to offer some innovative solutions that aren't always in the limelight.

Q: How has retirement changed?

A: We need to throw out the stereotype we've had that when you're 65 you quit working and head to the golf course. For Baby Boomers who want to stay active and contribute to society that model no longer makes sense.

Q: What is retirement security?

A: Retirement security is not the same as retirement investing, which has to do with individual retirement accounts and 401Ks. Retirement security requires a holistic approach that looks not only at investments, but also at savings, Social Security, health care costs, outstanding debts, and insurance. It's important to look at where work fits in too.

Q: What's the most important question facing those approaching retirement?

A: They should ask themselves how long they plan to work. I spend a lot of time in my book discussing why working longer makes a lot of sense. I'm not saying people should never retire. But I try to illustrate how working a few additional years can make an enormous difference in long-term retirement security.

Q: How so?

A: Every additional year of work postpones filing for Social Security. Waiting at least until you reach the age when you get full retirement benefits is beneficial. Also, every additional year of work allows you to make contributions to your retirement funds.

Q: How much of a financial difference does it make to postpone retirement?

A: It can be as much as 30 to 40 percent in annual income down the road.

Q: Is postponing retirement a good strategy for everyone?

A: It's good for knowledge workers, someone who works at a desk. It's probably not appropriate for those who do physical labor.

Q: What about older workers who have been laid off and retired involuntarily?

A: My book offers six rules for job hunting. For example, skill development matters, and that includes staying current with new technologies. And don't assume that you'll be able to find a job doing exactly what you did before. Another big trend is that people are moving into forms of entrepreneurship, or self employment using their skills in new ways.

Q: How worried should people be that they will outlive their money?

A: Quite worried. Most research suggests a significant percentage of Americans will run out of money before they run out of years to live. Working longer is one way to address longevity. Another theme in my book is to look for guaranteed income sources.

Q: Do women face special challenges in retirement?

A: Women tend to live longer and there is still a gender gap during the working years on the income side. Social Security payments are tied to a woman's earnings history. The same holds true for how much a woman can contribute to a retirement account. This translates into a security gap in the retirement years for many women.

Q: What can women do?

A: Get educated and have a retirement plan. Married women should find out about the spousal aspects of Social Security benefits. As a survivor, a woman can receive 100 percent of the spouse's benefits, though she then gives up her benefits. A delayed filing for Social Security benefits by a husband can be a critical way to boost lifetime retirement security for older women.

Q: Will older people be able to make up the investment losses they've suffered over the last several years?

A: Some interesting research has recently been done by the Center for Retirement Research at Boston College. It shows that the oldest Baby Boomers close to retirement now have not been hit the hardest by the latest downturn. They were lucky enough to have participated in the stock market growth of the 1980s and 1990s. Younger investors were not in the market then and will have the hardest time bouncing back.

Q: A house is often an older person's largest asset. Will home values rebound?

A: We are in such a deep ditch, it's hard to see how things will bounce back soon. My book offers practical ways to respond to the changing real estate market, such as adapting one's current home in order to live there comfortably.

Q: Do you plan to retire?

A: I have already moved into an "encore" career. One chapter in my book deals with the notion of reinventing oneself and transitioning into another career. I am doing the same kind of work I've always done, but now I am working as an independent, entrepreneurial journalist. One benefit of this kind of work is that you can dial it up and dial it down as the situation dictates. For now, I enjoy this phase because it allows me to control my destiny and make decisions for myself. But, as I say in my book, people should consider working longer but not forever.

More ideas on new approaches to retirement can be found at RetirementRevised.com.